La Trobe Financial

A credit fund is a trust structure that is operated by a fund manager which invests in various asset classes including loans secured by mortgages over real estate property.

Our Credit Fund uses investors’ money to grant loans secured by mortgages. You, as an investor, may receive the investment returns on those mortgages, after the fund manager deducts their fees and expenses of running and operating the Credit Fund. These loans can be secured by mortgages over retail, commercial, construction and development, industrial, rural or residential properties.

A credit fund is not a debenture scheme, as each investment is held on trust on behalf of the investors in the fund.

La Trobe Financial is committed to product excellence, investment security and service. We have over seven decades of experience in real estate financing and asset management. We draw from these years of experience in the financial services industry to serve your mortgage investment needs. All investments are subject to a credit analysis process prior to them being presented to you, the investor. Our commitment to excellence is delivered by:

• employing a team of legal and project advisers;
• ensuring the real estate security is appropriate;
• requiring additional collateral from borrowers where necessary;
• seeking pre-planned exit strategies from certain borrowers;
• requiring all mortgage investments to be at arm’s length from La Trobe Financial;
• obtaining independent valuations on all security; and
• conducting credit checks on all borrowers.

La Trobe Financial manages the mortgage loans. We co-ordinate all the legal documentation, ongoing administration and mortgage renewal negotiations.

^In limited circumstances, as outlined within the Fund Constitution, La Trobe Financial may undertake alternative valuation methods.

Mortgage investments are secured by tangible assets that you can ‘touch and feel’. Typically, the loans which are secured by a mortgage are based on a percentage of the appraised value of the real estate security also referred to as the Loan to Value Ratio (LVR). Security offered for the loan can include residential, commercial and industrial property, as well as vacant land and rural property.

There are no investment entry fees. All upfront costs are paid by the borrower at the application stage of the mortgage.

See the “Fees & Charges” section of the Product Disclosure Statement (PDS) for further information.

The minimum and maximum investment amounts are:

Please note that La Trobe Financial has the right to reject an investment application if it is not in the best interest of all investors.

No, La Trobe Financial has appointed Perpetual Corporate Trust Ltd as the Custodian of the assets of the Credit Fund and it is listed on the title as the mortgagee.

No, the SPDS details important information about the investment you are considering. After reading the SPDS, if you choose to sign and return the SPDS to La Trobe Financial, you will have made a commitment to invest.  This then forms an investment agreement for the investment product. 

Yes, register via our website to access our online investor platform, La Trobe Direct.

La Trobe Direct gives you 24/7 user friendly, safe and secure access to your investment accounts with the ability to review your balances and transactions as well as make new investments.

Click here to register

To assist with the registration process you will need the following on hand:

• your investor account number(s);
• mobile phone – you will receive text messages and emails to keep you up to date with the progress of your registration;
• email address;
• tax file number(s); and
• bank account details.

Investors receive electronically (and by post if requested) the following regular reports:

• Monthly Investment Snapshot & Portfolio Metrics Update;
• detailed Investor Activity Statements; and
• Financial Year Income Taxation Statement.

We aim to provide investors with the latest information about the Credit Fund, to help them monitor their investments. You can obtain up-to-date information about the Credit Fund at any time by:

• reading the monthly Credit Fund’s Investment Snapshot & Portfolio Metrics Update, available on our website, by phoning La Trobe Financial or by email;
• making enquiries with La Trobe Financial’s toll free Investor number 1800 818 818; and
• checking in with your La Trobe Financial Authorised Representative.

La Trobe Financial is committed to full transparency and reports all Credit Fund hardship in our monthly Credit Fund Investment Snapshot & Portfolio Metrics Update, which is available on our website.

There are currently seven (7) investment products:

1. Classic Notice Account – access to your money generally within 2 business days^#;
2. 90 Day Notice Account – access to your money generally within 90 days^#;
3. 6 Month Notice Account – access to your money generally within 180 days^#;
4. 12 Month Term Account – 12 month term investment where investment returns (determined and paid monthly) are variable^{^};
5. 2 Year Account – 2 year investment where investment returns (determined and paid monthly) are variable;
6. 4 Year Account – 4 year term investing in mezzanine notes in medium term credit assets originated by La Trobe Financial; and
7. Select Investment Account – where you choose the mortgage and term on a Peer-to-Peer basis.

Please see the PDS and the Target Market Determinations for further details.

^#We will make every endeavour to release your funds 2 business days for the Classic Notice, 90 days for the 90 Day Notice Account, and 180 days for the 6 Month Notice Account, after receiving your redemption request. We however have 12 months under the Fund’s Constitution to honour that request. In determining whether to honour your redemption request within 2 business days for the Classic Notice Account, 90 days for the 90 Day Notice Account or 180 days for the 6 Month Notice Account, we have to have regard to the Fund’s cash position and the best interests of all investors. There is a risk that a redemption request will not be honoured with the 2 business days, 90 days or 180 days. However, there has never been a case in the history of the Fund when we have not honoured a redemption request on time due to a lack of liquidity.

Yes.  We receive regular rating agency reviews to help benefit the financial adviser market to independently conclude on operational activities and benchmark observations.  View the latest ratings and awards here.

With our pooled investment accounts (Classic Notice Account, 90 Day Notice Account 6 Month Notice Account, 12 Month Term Account, 2 Year Account and 4 Year Account) you share the risks with all other investors in that account.

With the Select Investment Account, the investment return cannot be paid to you unless the borrower has made their interest repayment, consequently this has a higher level of investment risk than the pooled investment offerings. If the borrower makes a repayment late, you may be entitled to receive half of any late payment fee collected. This is not offered to our pooled investment account investors.

Prepaid interest is when an amount to cover the interest has been included in the total loan amount or where the borrower has made payments in advance and those payments are held in trust within the Credit Fund. Interest is then paid periodically as detailed in the SPDS. Generally, prepaid interest does not apply to consumer regulated loans.

Prepaid interest means that La Trobe Financial is holding the borrower’s future interest payments in trust within the Credit Fund. Prepaid interest provides certainty that interest for the loan term will be paid to you on time. However, it does not provide any greater certainty that the principal will be repaid on time.

LVR stands for “Loan to Value Ratio”. It is the loan amount compared to the valuation amount of the property offered as security for the loan.  At La Trobe Financial, the LVR will not exceed 80% for Peer-to-Peer mortgage investments and 75% for all other investment products.

While the Credit Fund can accommodate loans to a maximum LVR of 75% in the 12 Month Term Account and 2 Year Account, only prime residential securities will be considered to this level. Generally the maximum LVR of 75% will apply, with lower LVRs for Commercial (up to 70%) Rural (up to 55%) and specialised securities. The 12 Month Term Account does not invest in loans which are secured by a second mortgage.

See the PDS for more details.

The interest of an investor in the 12 Month Term Account and 2 year Account is as a tenant in common – in the same proportion as the amount the investor has invested to the total amount invested by all investors in the 12 Month Term Account and 2 Year Account.

Mortgages are generally considered low risk investments because they are backed by real property. In a declining market, the value of the underlying real estate must drop to below the value of the mortgage registered against the property and recovery costs before the investment is at risk. Based on the expected changes in the market, the LVR at the time of the initial loan is set conservatively to reduce the risk of loss.

Funds invested by you are held “in trust” by La Trobe Financial to be used only for the agreed purpose. When payments are received from the borrower, these amounts are also held “in trust” until distributed back to you, the investor. These trust funds and the transactions related to them are regulated by the Corporations Act, are audited annually, and may be subject to review by the Australian Securities and Investments Commission (ASIC) which is responsible for licensing Managed Investments Schemes. The integrity and soundness of the Investment Manager is critical. We are regulated by ASIC and not the Australian Prudential Regulation Authority (APRA). Your investment in the Credit Fund is not a bank deposit.

The PDS at section 9 titled “Investment Risks” outlines other risks and you should read this before investing.

La Trobe Financial generally takes legal action to recover the debt, but in many instances legal action may not be required if a repayment arrangement has been agreed to. If the matter needs to extend to legal action a judgment for possession may be required. Once judgment has been entered against the borrower, La Trobe Financial obtains physical possession of the property and will then market the property for sale. Once the property is sold, settlement usually takes place between 30 and 90 days. Our Asset Management team will provide regular written updates to you on the recovery process, and your monthly Investor Statement will detail the amounts owing to you.

La Trobe Financial has been committed to a conservative investment strategy since inception of the Credit Fund.  This brings with it a relatively conservative risk framework that underpins our risk management, monitoring and reporting practices.  The risk management practices applied are carried out by qualified and experienced staff and managed by our Chief Risk Officer.  Read about our Risk Management Systems.

A number of factors influence the investment returns. These include the type and location of the property and the borrower’s credit history. Usually a residential property has a lower interest rate than a commercial or rural property. However this doesn’t mean residential properties are less risky. All loans are dependent on the borrower making their loan repayments.

Investment returns for our pooled accounts (Classic Notice Account, 90 Day Notice Account, 6 Month Notice Account, 12 Month Term Account 2 Year Account and 4 Year Account) are determined and paid monthly in arrears and will be paid as directed by you either direct to your nominated financial institutions account or reinvested. ^{^}

Investment returns for Select Investment Accounts will be paid according to the Select Mortgage Investment chosen by you and paid as directed, usually monthly.

The rate of return are reviewed and determined monthly and may increase or decrease each month. The rate of return applicable for any given month is paid at the start of the following month. The rates of return are not guaranteed and are determined by the future revenue of the Credit Fund and may be lower than expected.

An investment in the Credit Fund is not a bank deposit, and investors risk losing some or all of their principle investment. Past performance is not a reliable indicator of future performance. Withdrawal rights are subject to liquidity and may be delayed or suspended.

Yes, you can reinvest your investment returns in the 12 Month Term Account and 2 Year Account. However, it is important to note that reinvested funds require 30 days’ written notice to be withdrawn.

While we expect that some loans will fall into arrears, the Credit Fund aims to continue to distribute an investment return on a monthly basis. It is our intention to pay a consistent return to investors on a monthly basis despite peaks and troughs in receipt of borrowers’ interest payments.

La Trobe Financial does not guarantee investors’ capital. The following order of priority applies to payment of money received following a mortgagee sale in accordance with the PDS and La Trobe Financial’s obligations at law:

1. First, towards payment of liabilities having priority at law to the mortgage investment, for example, Council Rates, GST obligations and liquidator’s fees (if applicable);
2. Secondly, in payment of La Trobe Financial’s or the Investment Manager’s fees, charges and other costs or expenses incurred in the proper performance of its duties (including legal costs on a full indemnity basis);
3. Thirdly, in payment of the investor’s capital investment; and
4. Fourthly, in payment of any interest at the lower rate, and thereafter at the higher rate (if applicable), as it falls due to which the investors are entitled but not yet paid.

You should be aware that GST may be payable on the sale of a property by La Trobe Financial in certain circumstances and this will reduce the funds available for distribution to investors, in accordance with priority number 3 above.

Where funds are recovered from the borrower or any third party subsequent to the distribution of proceeds following the sale of the security property, those funds will be distributed to investors according to the priority of their original investment.

The 12 Month Term Account and 2 Year Account is a fixed term investment. In the 12 Month Term Account investment is 12 months, and 2 Year Account is a fixed term investment of 2 years. Generally early redemptions from the 12 Month Term Account and 2 Year Account are not permitted.  We understand unique circumstances occur and each request for early withdrawal is reviewed and approved subject to the liquidity rules of the Credit Fund and at La Trobe Financial’s discretion. If an early withdrawal is approved, an early withdrawal fee will apply.  Refer to the PDS for current fees and charges.

Select Investment Account investments are treated as fixed term investments for the duration of the investment identified within the Supplementary Product Disclosure Statement. La Trobe Financial is under no obligation to process a withdrawal request during the agreed term of the investment. La Trobe Financial may at its discretion consider requests for withdrawal, only if a substitute investor is available. If a replacement investor is found and the investment manager approves the early withdrawal, an early withdrawal fee may apply.  Refer to the PDS for current fees and charges.